How Long Does It Take?

Dec 13, 2014

The question came up recently at a cost accounting course that Tara and I were teaching concerning the length of time it would take to implement a new standard cost system. This attendee had recently taken over the assignment for a closely held company of creating then implementing an entire cost accounting model for this family owned manufacturing business. This person had been working on the assignment for nearly a year and was by her estimation, not nearly complete.

As you might guess, she was getting pressure from the management team to complete the assignment so that they might begin managing with accurate and timely cost information. The real concern was not only how much time it had taken thus far to make the progress that she has made, but really a far greater concern was what she thought it was going to take to finish the assignment and fully implement the model.

We never discussed the actual progress she had made or how much was left to do but I believe her question revolved around from an overview, how long should it take from start to finish?

As you might guess my experience in dealing with the timing associated with implementation of a new system varies radically from company to company. This is due to the commitment of the management team; both with financial resources and talent available. It also depends on the complexity of the implementation. It has also been our experience that initial estimates as to the time it takes to implement such a system are usually very, very light.

There are problems associated with the time and availability of the individuals involved. There are also many technical issues associated with developing standards or rates or reporting problems, etc. These can never fully be anticipated at the start of the project. Even if there is a clear commitment by senior management to make the changes happen and adequate resources to complete them in a timely fashion, it can still take time. Many times the technical barriers that are uncovered related to gathering data and solving problems are large and require substantial effort to overcome.

We’ve had very sophisticated clients with dedicated implementation teams that we would have expected would be done in no time. In these situations implementation has been accomplished in 6 to 9 months which, of course, was far in excess of what we estimated it might be. We have had other examples with companies with significant talent and resources where the implementation has taken several years and perhaps longer for a full implementation of all the features.

There will most likely always be issues, but my estimate of how long it takes is variable depending on the assignment. I would say it is very difficult to do one in under six months unless huge amounts of talent and resources can be committed and then maintained on the project. This would also assume the number of technical problems that are uncovered is relatively small. If adequate talent and resources can not be focused on the issue until the completion of the project, then the entire implementation process increases exponentially and it becomes very tough to estimate what the whole project will take from beginning to end because of the high degree of variability of the resource available as well as the time to solve the reoccurring technical issues.

Categories: Cost Accounting